CalWORKs Summary Program Services & Utilization Poverty Measures

Poverty Measures


This table explains the difference between how poverty is defined in the Official Poverty Measure (OPM) and in the Supplemental Poverty Measure (SPM). In the next section, we use both measures to compare poverty in California to the rest of the country.

Knowing how poverty is defined and measured is essential to understanding the CalWORKs program’s design and impact. 

The OPM and SPM are fundamentally different ways of measuring poverty. The OPM was developed by the Social Security Administration in the 1960s to measure poverty in terms of a family’s food budget. The OPM assumes that food costs consume one-third of a family’s budget and defines poverty levels in relation to food prices, adjusted annually for inflation. One limitation of the OPM is that food costs have declined as a share of the family’s budget since the OPM was created. Another important limitation highlighted in the next section is its failure to take into account the full range of safety net supports available to low-income Californians.

the spm is an alternative way to measure poverty, the nation’s progress in combatting poverty, and the available policy levers to lift americans out of poverty. its methodology allows policy makers to measure the combined anti-poverty effects of these resources relative to a poverty threshold that accounts for variations in cost of living by geography. it stacks up the supports received by families against a poverty threshold to measure the number of families and children lifted out of poverty in the united states. the spm also considers the cost of basic goods for families (food, clothing, shelter, and utilities) plus an additional amount allowed for basic needs (e.g., personal care, household supplies, nonwork-related transportation).  

This is a reference table that only changes if the definition of either measure changes.

The poverty rate is the share of all individuals that live in households with income below the poverty level.  This shows how California compares to the United States overall and where it ranks among the fifty states in the share of people living in poverty.

The Official Poverty Measure (OPM) was developed by the Social Security Administration in the 1960s.  A simple tool based on a family’s food budget relative to income, the OPM is primarily used as a benchmark to determine eligibility for various government welfare programs Note: the OPM does not capture reductions in poverty due to other state and federal supports like tax credits and in-kind transfers like food assistance and housing vouchers. The Supplemental Poverty Measure (SPM) is a more effective measure to track progress on fighting poverty.

if a family’s total income falls below the relevant poverty threshold, all family members are considered to be in poverty. the poverty income threshold varies by family size and composition (adults vs. children) but not by geographic region. the income in opm includes cash income (before tax) and excludes noncash in-kind transfers such as snap benefits and housing subsidies.

One of the main goals of CalWORKs is to reduce child poverty.  The OPM is one way of measuring California’s progress in reducing child poverty. The OPM captures reductions in poverty from cash income, which includes earned income as well as cash assistance from CalWORKs. 

For example, as relatively more families climb the economic ladder by increasing their earned income, the share of families with income below the OPM threshold declines. As relatively more eligible families take up CalWORKs cash assistance, the share of families with income below the OPM threshold declines.

it is important to note that opm does not capture reductions in poverty due to other state and federal supports like tax credits and in-kind transfers like food assistance and housing vouchers. the opm is therefore a partial measure of the state’s progress, at best. we must use other measures over poverty to better account for the impact of the full range of safety net supports available to low-income californians (next section).

The estimates presented here are the most recent for which data are available: calendar year 2023.

This plot compares California to the United States as a whole in terms of children receiving TANF cash aid as a share of all children living in poverty. 

The number of children receiving TANF cash aid in California comes from CDSS administrative data.  The number of children in poverty comes from the US Census Bureau’s Current Population Survey.  The number of children in poverty is only available on an annual basis whereas the number of children receiving TANF cash aid varies from month to month.  Therefore, CDSS takes the monthly average number of children receiving cash aid each year and divides it by the number of children in poverty in that year.

Although this is not a measure of take-up because not all children living in poverty are necessarily eligible for TANF, the percentage visualized in this plot is primarily determined by:

  • TANF take-up: the share of TANF-eligible children receiving TANF
    • Since the income eligibility threshold for TANF is lower than the federal poverty line, increases in take-up will translate into a higher share of child in poverty receiving TANF cash aid.
  • The extent to which California or other states direct TANF block grant funds towards direct cash aid (vs. other allowable uses of funds)
    • A state that directs few block grant funds towards direct cash assistance necessarily have a very low number of children receiving TANF cash aid, lowering the % in the plot.   

CalWORKs is a child anti-poverty program. Direct cash aid is one of the most effective anti-poverty interventions. But that cash needs to make its way into the pockets of children and their families to actually reduce poverty today. 

Relative to the rest of the country, California’s TANF program (CalWORKs) provides direct cash aid to far more children in poverty – typically 2-3x more than the national average. This means that California is a national leader in realizing the anti-poverty impacts of TANF.

Under current CalWORKs eligibility rules, it is not possible for California to reach 100%, since not all children in poverty are eligible. But expansion of eligibility and/or increases in CalWORKs take-up could further increase the share of children in poverty receiving direct cash aid.

The plot incorporates data from the most recently available year of poverty data: calendar year 2023.

The Resource Model is a dashboard tool that examines the anti-poverty effects of state and federal supports on families participating in CalWORKs. Each resource group uses a different color in the chart and data resources are available on the next slide. Region, CalWORKs status, aided children, and aided adults can be sorted through a drop-down.

Families receiving cash assistance through CalWORKs typically are also eligible to receive benefits from several other anti-poverty programs that make up the state and federal safety net. The Resource Model aggregates these benefits for families of different sizes and examines whether they lift a typical family receiving CalWORKs out of poverty.

Programs Included

This model includes resources that CalWORKs families are likely categorically eligible for, either because participation in CalWORKs provides categorical eligibility (e.g., CalFresh) or because a child in the household is eligible for a near-universal benefit (e.g., expanded Child Tax Credit). This model does not account for benefits that some, but not all, CalWORKs households may receive depending on household circumstances (e.g., benefits related to disability status, elderly family members, or unemployment).

The following resources are included:[1]

  • CalWORKs: we apply typical deductions for the CalWORKs calculation and show how the benefit amount varies by region, exemption status, and family size.
  • CalFresh: we apply typical deductions for the CalFresh calculation and show how the benefit amount varies by family size.
  • State Utility Assistance:
    • The California Alternative Rates for Energy Program (CARE)
    • The California Lifeline Program
  • State Tax Credits:
    • The California Earned Income Tax Credit (CalEITC)
    • The California Young Child Tax Credit (CYCTC)
  • Federal Utility Assistance:
    • The Federal Affordable Connectivity Program
    • The Federal Lifeline Program
    • The Low-Income Home Energy Assistance Program (LIHEAP)
  • Federal Tax Credits:
    • The Earned Income Tax Credit (EITC)
    • The Child Tax Credit (CTC)
    • Earned Income

Poverty Measures Included

We include two distinct measures to define whether a household is in poverty: The Official Poverty Measure (OPM) and the Supplemental Poverty Measure (SPM). The OPM and SPM are fundamentally different ways of measuring poverty.

The OPM and SPM differ primarily in how they define: 1) a household, 2) household resources, 3) household costs and 4) poverty thresholds.

Household definition:  The OPM defines a family as individuals related by birth, marriage, or adoption.  In contrast, the broader definition of the SPM “resource unit” includes individuals related by birth, marriage, or adoption, as well as cohabitating partners and foster children.  As a result, the number of people whose poverty status is measured is larger for the SPM than for the OPM.

Household resources:  The OPM only counts pre-tax cash income as a household resource.  By contrast, the SPM considers post-tax cash income (including tax credits) plus any in-kind benefits such as nutritional assistance.

Household costs:  Housing costs are not considered in calculating the OPM but are in the SPM.  In addition, several common household expense items, such as out-of-pocket medical costs, child care expenses, and work-related expenses (including transportation) are subtracted when calculating total family resources in the SPM.

Poverty thresholds:  The OPM adjusts for inflation using the Consumer Price Index (CPI) for all goods and calculates poverty thresholds by family size and age of family members.  The SPM is revised to reflect varying standards of living (for example, for variation in family/individual expenses/costs, with adjustment for geographic differences in prices across the states/geographic areas).

[1] Dollar amounts presented in the resource model represent benefit values for the given year. For all tax calculations, including income tax and tax credits, we utilize figures from the previous tax year, under the assumption that one would pay income tax and receive appropriate tax credits for the current year. Any amount that is received as a lump sum amount (e.g., tax refunds) is divided by the monthly amount to show the total monthly resources, in line with previous iterations of the CalWORKs Annual Summary.  

Combined safety net supports reduce poverty: The goal of the benefit and ource model is to demonstrate the anti-poverty effects of combined state and federal supports available to different types of families participating in CalWORKs. Taken together, these supports can have a powerful anti-poverty impact. A family of three receiving CalWORKs with as little as $600 in monthly earnings, would be lifted above the SPM poverty threshold by the combined resources available through the safety net in 2023. The modal size of a CalWORKs family is three and the median earnings for a family of three is $0, which means that the combined safety net lifts the modal family profile above the SPM.

With the expiration of pandemic supports, very low-income families have experienced a decline in resources, with their overall income and resources falling below the SPM threshold: n 2021, CalWORKs families that received state and federal pandemic assistance were lifted above the (higher) SPM poverty threshold. Once those pandemic supports were lifted in 2022, however, the lowest-income families experienced a decline in supports, and were no longer above the SPM poverty line. Specifically, all families of three making $800 or less fell below the poverty line after pandemic assistance expired.

Access and full receipt are key to realizing the anti-poverty impacts of California’s safety net: The ource model assumes that families successfully access various safety net programs, including state and federal tax credits, utility assistance and CalFresh. This underscores the importance of ongoing work to maximize program cross-enrollment and tax credit take-up.

CalWORKs grants drive anti-poverty impacts for extremely low to no-income families:  alWORKs grants are designed to offer greatest support to those with the greatest need. Although the specific amount varies by year, CalWORKs grants make up approximately 68% of after-tax resources for a family of three with no earned income.

Despite the combined effects of these programs, almost half of CalWORKs assistance units fall below the SPM poverty threshold: With the expiration of remaining pandemic-era benefits and expansions in 2023, almost all CalWORKs family configurations with no earned income fell back below the SPM poverty level. About 46% of assistance units receiving CalWORKs cash assistance have no earnings. This means that at least half of CalWORKs families still remain below the SPM threshold of poverty regardless of their household composition, exemption status, and geographic region.

Levels of support vary by family characteristics: Earned income, family size, region, and exemption status change the benefit amounts of some of these programs and, as a result, change the total resources available for a family. The current version of the ource model allows users to examine how resources vary based on these characteristics.

The new interface also allows the user to more easily identify the exact amount and/or breakdown of amounts for each benefit type by hovering their cursor over the colored sections of the bars for the benefit they are interested in. Previously, such information was provided in a separate large table, which was less user-friendly. We calculate each benefit amount using the most up-to-date information about tax rates, tax credit amounts, CalFresh maximum allotments and standard deductions, and utility subsidies for families in 2023.